Suppose parties call for Islamic law and specified a judicial forum. If a court shied away from deciding that, it would leave the issue unresolved. Essentially you would be denying judicial review to parties who wanted a court to use religious law and to resolve the question. Which kind of seems like discrimination against a religion, telling its adherents they are not allowed to specific religious law in their contracts.

I usually much oppose discrimination against religion (see, e.g., my Equal Treatment Is Not Establishment), but I think here such discrimination is dictated by what I call the No Religious Decisions strand of Establishment Clause caselaw. Here’s a very brief summary: In a long line of cases (such as Presbyterian Church in the United States v. Mary Elizabeth Blue Hull Memorial Presbyterian Church (1969)), the Supreme Court held that secular courts may not resolve religious questions, such as which rival church group most closely follows orthodox church teachings. Some states had rules, borrowed from English law, under which the more orthodox group would get to keep the church property, presumably on the theory that this would be more in keeping with what was intended by past donors to the church. But the Court held that such rules may not constitutionally be applied by civil courts (paragraph break added):

First Amendment values are plainly jeopardized when church property litigation is made to turn on the resolution by civil courts of controversies over religious doctrine and practice. If civil courts undertake to resolve such controversies in order to adjudicate the property dispute, the hazards are ever present of inhibiting the free development of religious doctrine and of implicating secular interests in matters of purely ecclesiastical concern. Because of these hazards, the First Amendment enjoins the employment of organs of government for essentially religious purposes; the Amendment therefore commands civil courts to decide church property disputes without resolving underlying controversies over religious doctrine. Hence, States, religious organizations, and individuals must structure relationships involving church property so as not to require the civil courts to resolve ecclesiastical questions.

The Georgia courts have violated the command of the First Amendment. The departure-from-doctrine element of the implied trust theory which they applied requires the civil judiciary to determine whether actions of the general church constitute such a “substantial departure” from the tenets of faith and practice existing at the time of the local churches’ affiliation that the trust in favor of the general church must be declared to have terminated. This determination has two parts. The civil court must first decide whether the challenged actions of the general church depart substantially from prior doctrine. In reaching such a decision, the court must of necessity make its own interpretation of the meaning of church doctrines. If the court should decide that a substantial departure has occurred, it must then go on to determine whether the issue on which the general church has departed holds a place of such importance in the traditional theology as to require that the trust be terminated. A civil court can make this determination only after assessing the relative significance to the religion of the tenets from which departure was found.

Thus, the departure-from-doctrine element of the Georgia implied trust theory requires the civil court to determine matters at the very core of a religion — the interpretation of particular church doctrines and the importance of those doctrines to the religion. Plainly, the First Amendment forbids civil courts from playing such a role.

Now one could argue that this only applies to “resolving underlying controversies over religious doctrine” when called on to do so by a special state-created legal rule, such as the preference for the more orthodox group, and that such resolution of doctrinal controversies could take place when interpreting voluntarily entered into contracts, wills, deeds, trusts, and the like. But I think the logic of the Court’s decision encompasses all civil court decisions about what is the right interpretation of legal doctrine (as opposed to questions, which arise in religious exemption schemes, about whether a claimant sincerely believes in a particular interpretation), especially given the later decision in Jones v. Wolf (1979). And that’s the view lower courts have taken: “[A] court can invoke a secular interpretation of church deeds, by-laws and canons, thereby avoiding judicial entanglement in issues of religious doctrine, polity and practice. When the application of this standard requires judicial involvement in a [religious] doctrinal question, however, it may not be relied upon.” “[P]rovisions in deeds or in denomination’s constitution for the reversion of local church property to the general church, if conditioned upon a finding of departure from doctrine, could not be civilly enforced [quoting and endorsing a concurring opinion in a different Supreme Court case].” See also this decision.

And I think this rule is right, even though it does “seem[] like discrimination against a religion, telling its adherents they are not allowed to specific religious law in their contracts” (or rather like discrimination against religion generally). The alternative, after all, is for courts to take sides in deciding which rival religious view — say, which understanding of Islamic law — is right and which is wrong, which would itself involve discrimination in favor of one religious subgroup (the one whose view is adopted by the civil courts as the true view of Islamic law, Jewish law, etc.) and against another religious subgroup. That strikes me as worse than civil court abstention from all attempts to decide how to interpret religious concepts.

Fortunately, religious observers who want their disputes settled according to religious law generally have a simple solution: They can provide for arbitration by some religious tribunal that they choose, and courts will generally then enforce the result of that arbitration. Civil courts will no longer be called to decide what Islamic/Jewish/etc. law “really” requires, yet religious believers can have their disputes adjudicated under religious principles. And in fact there are such arbitral bodies around, in a wide range of religions, and they are often used.

For more on related questions in the context of kosher enforcement laws — and proposed halal enforcement laws — see here and here.